Irregularities in the settlement of the shield subsidy 2.0. PFR – administrative or civil matter

Probably Polish entrepreneurs do not need to be presented what was the objective of the government programme related to “Tarcza” 2.0”, which was implemented by the Polish Development Fund. It should only be mentioned that the government paid out approx. 73,200,000,000 PLN approximately 353 thousands of entrepreneurs[1] .

Some beneficiaries faced the issue of refusing to allocate funds from the Government Programme “Tarcza” 2.0” or with the question of its settlement by PFR S.A. and the need to reimburse some of the funds. In the course of its decisions, the entity granted or refused to grant funds, and, as part of the settlement of the subsidy, it sometimes issued a decision ordering it to reimburse some of the funds.

Tasks conducted by PFR S.A.

Entrepreneurs dissatisfied with the decision of PFR S.A. began to wonder how to sue them. It is worth noting that the use of the term "decision" seems to be a far-reaching move from the legislator.

After all, the PFR decision does not comply with the rules of administrative law, which is usually a document with a laconic explanation of the basis for the settlement of the subsidy of the government programme, and, moreover, in the doctrine, the case-law continues to dispute whether PFR S.A.

operates within the administrative authority.

However, considering whether we are dealing with administrative or civil matters, it is worth to explain the tasks performed by PFR S.A.

These tasks include:

the performance of the tasks assigned by the government authorities, other bodies carrying out public tasks or bodies of local government, in particular in connection with situations of crisis, including the spread of viral infectious disease; SARS-CoV-2 (section 1);

the performance of the tasks related to staff capital plans referred to in the Act of 4 October 2018 on employee capital plans (Journal of Laws of 2020, item 1342) (section 5);

taking action to prevent or mitigate the effects of crisis situations within the meaning of Article 3(1) Act of 26 April 2007 on crisis management (Journal of Laws of 2022, items 261, 583), including the effects of spreading COVID-19, in particular by: providing financial support to entrepreneurs and other entities affected by these situations, including non-refundable or in the form of guarantees or guarantees.

According to Article 60 u.p.p.k. (Staff Capital Plans Act (Journal of Laws of 2020, item 1342 t.j. of day 5 August 2020) gave the PFR certain administrative powers of administrative authority. The provision provides:

„Article 60 [Declaration of compliance]

The investment fund, PTE, occupational pension company or insurance undertaking shall submit to the PFR and the supervisory authority, under the penalty of making false claims, a statement of compliance with the conditions referred to in Article 59(1). The making statement is obliged to include in it the following clause: “I am aware of the criminal liability for making a false statement.” This clause replaces instruction on criminal liability for making false statements.

(…)

Where the declarations and documents referred to in section 2, do not contain deficiencies, PFR, within the time limit 30 the days from the date of their receipt, shall include the company of investment funds, PTEs, occupational pension societies or insurance undertaking in the PPK records.

(…)

If the PFR finds that the declaration or documents referred to in section 2, contain deficiencies, calls on the company of investment funds, PTE, employee pension society or insurance company to complete them within the time limit 14 days.

(…)

After the deadline referred to in section 4, The PFR shall inform in writing of the lack of possibility of placing an investment fund association, a PTE, an occupational pension society or an insurance undertaking in the PKP records.

(…)

From the information referred to in section 5, an appeal to the supervisory authority.

Until further notice referred to in section 6, the provisions of the Act of 14 June 1960 - Code of Administrative Procedure (Journal of Laws of 2020, items 256, 695).”

The subsequent tasks of the PFR arise from the law of u.z.k. (Laws of 26 April 2007 on crisis management (Journal of Laws of 2020, item 1856). Under the above-mentioned law, PFR S.A. may carry out tasks related to the emergency situation specified in Article 3(1), constituting:

„1) a crisis situation - this should mean a situation affecting people's safety, property in significant sizes or the environment, causing significant limitations in the operation of competent public administrations due to the inadequacy of their forces and resources;"

Legislative Article 2 U.z.k. indicated that the emergency order was the activity of public administrations. The applicant cites the wording of the Article:

„Article 2 [Concept of crisis management] Crisis management is the activities of public administrations that are part of national security management, which consists in preventing, preparing to take control of crisis situations by means of planned actions, responding to, removing and restoring critical resources and infrastructure."

Special attention should be paid to the amendment of the Act 12 March 12 March 2022 by adding Article 7a-c of day 12 March 2022 (Journal of Laws of 2022, item 583). These amendments entered into force on 12 March 2022 with power from 24 February 2022 The revised rules extend the list of entities obliged to undertake specific tasks due to a crisis situation. The earlier wording of the Act did not allow companies to carry out part of the crisis tasks, but required the operation of public administrations.

Only part of the tasks belonging to PFR S.A. are cited. As part of the government subsidy implemented by the above entity, it is important Article 21 Act of 4 July 2019 about the development institution system. That act states that the subsidy measures may be granted after the entrepreneur has made a statement. If the statements were false, the entrepreneur would be subject to criminal liability.

NSA: dispute over the settlement of the shield subsidy 2.0. subject to an administrative court

The question to be discussed is whether PFR S.A. has an administrative power element in the implementation of the government programme and in what capacity does it operate – whether it acts as a commercial law company or whether it acts as an authority? The initial rulings of the administrative courts indicated that the case should be considered civil as the parties had concluded a civil law agreement. However, this was not a comprehensive analysis of the whole problem.

In a recent ruling, the Supreme Administrative Court indicated that: “Since the Fund should be treated as a public administration body (in functional terms) carrying out public tasks, the nature of its activities should be considered.

The actions of the Fund cannot be attributed to the value of the application of the law, which has been crowned by an administrative decision. It is, on the other hand, the exercise of the law, without any specificity of the standard of substantive law.

The action taken on the basis of a direct legal standard to refuse to provide support and consequently to conclude the contract is therefore a legal form of administrative action, subject to review by the administrative court on the basis of Article 3(2)(4)  PPSA.

For these reasons, the dispute is examined by the administrative court because the jurisdiction of that court derives from those provisions of the law, to which the legislature refers Article 184 Constitution’[2].

The time and subsequent rulings of the administrative courts will show whether we are dealing with the landmark ruling of the Supreme Administrative Court, which will determine a new course of case law, or whether it will prevail over the position held so far by the administrative courts.